15 September

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Revenue Recovery Series Part 4: Mastering the No Surprises Act & IDR Arbitration Focus

By: Pearl Walia

What is the No Surprises Act and Why was it Passed?

Before the COVID-19 pandemic, two-thirds of Americans feared they would not be able to afford an unexpected medical bill. For years, many people with private health insurance were surprised with high medical bills after being treated by an out-of-network (OON) provider. In December 2020, Congress passed the No Surprises Act (NSA) to address this problem and protect patients from these unexpected costs. The Act applies to both emergency and nonemergency services.

Before the NSA, OON provider bills were common for patients admitted to hospitals or treated in emergency departments. A study from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) found patients paid an average of $628 out of pocket for an emergency department visit, and $2,040 for an inpatient hospital admission. These unexpected costs caused significant financial distress for much of the population.

The NSA addressed this by prohibiting surprise “balance billing” for services rendered by OON providers. Balance billing occurs when a provider bills a patient for the difference between the provider’s charges and the amount covered by insurance. For example, if a patient receives OON services (i.e air ambulance transport), or is treated by an OON provider at an in-network hospital, the patient cannot be billed for the amount their insurance does not cover. Instead, they only pay only the normal in-network costs: copay, coinsurance, or deductible. If the insurer and provider cannot agree on a price, either party may request an independent resolution process to determine appropriate reimbursement rate.

What Happens if the Provider and Payer Can’t Agree on OON Reimbursement?

When a dispute arises over OON payment, the parties must first attempt “open negotiation,” before proceeding to arbitration. If they reach no consensus within 30 days of the open negotiation notice, either party may initiate arbitration through Internal Dispute Resolution (IDR).

IDR is a binding arbitration process overseen by the U.S. Department of Health and Human Services, the Department of Labor, and the Department of the Treasury. Under this system, the parties select a certified third-party entity from an approved list to resolve the dispute and determine a settlement amount that both sides must accept. Payment is then due within 30 calendar days.

What Information Do Providers Need to Initiate the IDR Process?

Before starting the IDR Notice of Initiation web form, providers should have the following information and documents ready:

Identification of the qualified IDR services, and whether they are batched or bundled.
Dates and location of qualified IDR services
Type of qualified IDR services (i.e. emergency services and post-stabilization services)
Item and service codes, along with the corresponding place of service
Attestation that qualified IDR services fall within the scope of the Federal IDR process
The provider’s preferred IDR entity

The Federal IDR Portal

In enforcing the NSA, the government recognized that providers often lacked sufficient information to determine whether a claim qualified for the IDR process. In response, the NSA now requires insurance companies to include special billing codes on their Explanation of Benefits (EOBs) and remittances, informing providers whether a claim is covered under the NSA and is eligible for IDR. Insurance companies must also register with the Federal IDR Portal, receive a unique ID number, and provide information about the health plan and employer sponsor at various stages of the process. Together, these requirements give providers the information they need to quickly determine whether a payment dispute is eligible for IDR.

As noted above, before a payment dispute can proceed to arbitration, the parties must first engage in open negotiation for 30 business days through the IDR portal, not simply through emails or phone calls. The party initiating negotiation must submit a standard online form listing details such as the names of both parties, the amount the insurance company originally paid or denied, and the amount the provider believes it should be paid. The portal creates a clear, transparent record of the negotiation and ensures that both parties have the information they’ll need if the dispute later proceeds to arbitration.

What is “Batching” of Claims?

Batching refers to grouping multiple OON claims together into a single dispute for the IDR process, allowing providers and insurers to resolve several claims at once. It is an economically efficient way to group lower-dollar disputes and reduce the need for repeated arbitration. NSA provisions limit batched disputes to 50-line items

Parties may batch disputes if:

The same provider and payer are involved in the dispute
Timing requirements are met (the services were furnished by the same provider to the same plan or issuer within 30 days).
The services were provided to a single patient on one date of service, or on consecutive dates of service
The services share the same or comparable service (i.e. CPT codes, HCPCS, DRG codes)
For specific high-volume specialities such as anesthesiology, radiology, pathology, and laboratory services, claims can be batched using specific CPT code ranges, as long as they fall into similar procedure types (i.e. scans or tests) or relate to the same body part

What are some Common Batching Errors?

Some common batching errors include:

Batched services are recorded under a single emergency episode of care despite using multiple service codes
Disputes are submitted as single line items but include the total cost of all services provided during the episode of care
The services were not provided by the same provider
Payment for the services was not made by the same group health plan
The services were provided outside the 30-day window following the first service in the batch

To avoid these mistakes, the party initiating the IDR process should contact the certified entity to clarify its batching guidelines. It is also recommended to include an EOB in the portal documentation to help the entity understand the batching method chosen. Providers and payers should continue to monitor upcoming federal guidance on batching criteria and IDR portal functionality, as changes may introduce new open negotiation and initiation requirements.

Strategies to Succeed in Arbitration

Arbitration can be costly, especially when the parties have not agreed on payment rates by contract. The NSA uses “baseball-style” arbitration, also known as final-offer or pendulum arbitration. Under this system, each party submits a final offer, and the arbitrator must choose one or the other; there is no middle ground. This means the losing side may end up paying or receiving significantly more than it considers fair.

Strategies for succeeding in this style of arbitration include:

Strong Documentation: There’s no such thing as too much evidence. Success in arbitration is closely tied to through preparation of strong data, solid evidence, and skilled negotiators. It is a strong practice to include EOBs that clearly explain why specific services were provided, along with complete patient medical records and treatment summaries.
Know What Factors Arbitrators Consider: The Act requires arbitrators to weigh several factors equally, including: the qualifying payment amount; the market share of both parties; the training, expertise, and scope of services of the provider; and evidence of good-faith efforts to reach a prior agreement, including any contracted rates between the parties in the previous four years.
Check How Your Proposed Rate Aligns with the QPA: The Qualifying Payment Amount (QPA) is a plan’s median contracted rate for same or similar services in the same geographic market. The QPA serves as a baseline that helps arbitrators judge the reasonableness of an offer. A submitted offer should align closely with the QPA, and any significant deviation should be backed by credible, objective evidence.
Emphasize Provider Qualifications: Submit evidence of the clinician’s or facility’s training, expertise, and quality of care to further support the offer.

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It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice; it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services, please get in touch with me using the contact information listed above.

All information and references to laws, rules, regulations, and advisory opinions were accurate as of this time, but laws are constantly evolving. Please get in touch with me to ensure that the law governing your business is up to date. Thank you.

17 August

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What Are My Options If I’ve Been Wrongfully Terminated from my Hospital Residency Program?

Posted by Jamaal R. Jones, Esq.

in Blog

Introduction

The long and arduous road to becoming a doctor is one that only a few people get to experience in their lives. Those few, dream of becoming a doctor at an early age which makes the journey seem that much longer. Your parent or neighbor might have been a doctor and that relationship might have created a desire to pursue the same career path. Maybe you were motivated by a desire to serve your community by providing health services to the poor or disabled. Unfortunately for you, your career as a doctor may come to a screeching halt before you complete your medical residency program. If you are at risk of being unceremoniously discharged from your residency program or have already been discharged there are certain legal considerations that you should examine.

Disciplinary Board

If you are discharged from a medical residency program it is important to examine the language contained in the hospital policies and procedure manual. In the manual it will explain the procedure for internal disciplinary action taken against hospital staff, which may require a mandatory board hearing depending on the alleged infraction. Prior to the board hearing, a neutral intermediary may be utilized so that direct communication between the hospital and the resident is limited. The disciplinary board may be comprised of a three-person panel where you can choose to present your defense. I would advise against signing any documents presented to you by the hospital after you have received written notice of the disciplinary hearing until you have spoken to an attorney with experience in health and employment law. The manual will state how many days the panel has to render its final decision regarding your status in the hospital residency program, and the method by which the panel used to render the final decision. There will also be a procedure for filing a timely appeal should you choose to do so after an unsuccessful initial board hearing.

Suspension, Termination, or Resignation

The panel may recommend suspension or termination from the hospital residency program. The length of suspension will vary depending on the circumstances. A board’s decision to suspend or terminate a resident should be determined objectively but it’s difficult to refute the fact that there is a subjective component. This is why one resident who committed similar bad acts may only be suspended while another resident may be terminated. Hospitals have the authority here to make that determination and unless there is clear employment discrimination a court is unlikely to undermine and overthrow the hospital’s decision.

In some instances, I have witnessed the hospital allow the resident to voluntarily withdraw or resign from the residency program so that it doesn’t diminish their chances of gaining acceptance to another residency program. The thought of starting anew in a different residency program is chilling, but given the circumstances this could be your best option. You must decide whether you want to explain why you resign from the program or you can let your records speak for themselves. If you elect to be terminated from the program and subsequently apply for admission into a different program you will be required to submit your records from your previous residency program. Additionally, the hospital residency program may ask for references where the details of your departure may come to light. Further, the hospital manual should be examined alongside your hospital residency employment contract.

Arbitration, Lawsuit, or Administrative Complaint

Your residency employment contract will contain the terms and conditions of your employment during the residency program. The contract will most likely bind you to a mandatory arbitration in the event that a legal matter arises between you and the hospital. Hospitals prefer arbitration because:

They are usually less expensive;
Parties can choose the arbitrator:
Parties can choose the time and place of the arbitration;
The proceedings are held privately behind closed doors; and
Its outcome does not become part of the public record.

Arbitration is not held in court but in a court-like setting complete with discovery proceedings and an arbitrator acting as a judge. Additionally, the arbitration is resolved much faster since the parties don’t have to wait for availability on the court’s docket, which can take months before you are actually heard by a judge. Final judgment by an arbitrator is binding and very difficult to successfully appeal.

Depending on the reason why you were fired you may be able to file a complaint with the Accreditation Council for Graduate Medical Education (“ACGME”) which is an organization that in part, helps physicians in graduate medical education receive fair solutions to residency/fellowship education-related concerns and formal complaints. Most residency programs are accredited by the ACGME. The ACGME requires that residents have a right to present their defense before a board or panel. The ACGME’s Resident Services division does not adjudicate disputes between individual persons and residency/fellowship programs or sponsoring institutions. Resident Services does not address issues regarding matters of admission, appointment, contract, credit, discrimination, promotion, or dismissal of faculty members, residents or fellows.

As such, depending on the facts and circumstances I advise residents against filing a lawsuit against the hospital unless you are terminated for an illegal reason. Illegal reasons can include, but are not limited to, discrimination based on race, gender, sexual orientation, country of origin, nationality, or religion. You may make a claim alleging discrimination under Title VII of the Civil Rights Act of 1964 and breach of contract if the facts could support such a claim. In cases where residents have successfully won lawsuits against the hospital for discrimination they introduced ample evidence from which it could be concluded that they were unlawfully discriminated against. Residents may try to obtain evidence of the following:

(a) testimony or affidavit from doctors in a direct supervisory position to attest to the satisfactory nature of your work;

(b) evidence to rebut other supervisor’s negative evaluations of you – the resident;

(c) evidence of other residents with low test scores and unfavorable evaluations who have been allowed to continue in the program; and

(d) evidence that you were able to successfully complete the residency requirements since leaving the hospital.

In some jurisdictions, direct evidence of discrimination is not required. A plaintiff may entitled to rely on circumstantial evidence to convince the trier of fact that an employer’s explanation for his discharge is pretextual and that his discharge was more likely than not motivated by discriminatory intent. However, more of today’s courts are less likely to rule in a resident’s favor unless the resident can show direct evidence of discrimination. In Zaklama, M.D. v. Mt. Sinai Medical Center, 842 F.2d 291, 296 (11th Cir.1988), Dr. Zaklama was able to obtain evidence of a-d above, but it took approximately six years for the case to be fully adjudicated and a lot of money in legal fees.

Regardless of whether you go before a hospital board, arbitration, or file a complaint with the ACGME you will have the opportunity to review your evaluations, personnel file, and credentialing so that you can build your defense.

Conclusion

If you feel that you are at risk of being removed from your Hospital Residency Program and would like to speak to an attorney about your options please contact us immediately. You should explore all of the options available to you because this is your career at stake. There is typically a very short window to file an appeal so it is imperative that you contact an attorney immediately if you are facing a disciplinary board hearing at your hospital.

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This post was authored by Jamaal R. Jones, Esquire and Matt Lester of Jones Health Law, P.A. for more information contact us at (305) 877-5054; email us at JRJ@JonesHealthLaw.com, or visit our website at www.JonesHealthLaw.com.

It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice, it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services please contact me using the information listed above.

All of the information and references made to laws, regulations, and advisory opinions were accurate based on the law as it existed at this time, but laws are constantly evolving. Please contact me to be sure that the law which will govern your business is current. Thank you.